Blanca Rosa Echeverria-Hernandez v. U.S. Immigration and Naturalization Service

946 F.2d 1481

9th Cir.

1991

Check Treatment

Blanca Rosa ECHEVERRIA-HERNANDEZ, Petitioner, v. U.S. IMMIGRATION AND NATURALIZATION SERVICE, Respondent.

No. 89-70236

United States Court of Appeals, Ninth Circuit

Decided Nov. 5, 1991

1481

Argued En Banc and Submitted Sept. 26, 1991.

that Congress intended not to mandate assignability, but intended instead to allow the free marketplace to work out such competitive, cost effective, medical expense reducing structures as might evolve.

2. Appellees’ argument that the fiduciary relationship was violated.

In addition to their argument that ERISA mandates assignability, Appellees point out section 1104 of ERISA provides fiduciaries shall discharge their fiduciary duties solely to further the beneficiaries’ interests. 29 U.S.C. § 1104(a)(1)(A)(i).⁹ Appellees argue assignments are in the best interest of assigning beneficiaries, and so Delta violated its fiduciary duty to these particular beneficiaries when it drafted the plan containing the anti-assignment clause, and when it failed to honor the assignments.

However, at the time the terms of the plan were under negotiation, Delta was dealing at arms length, and was not yet a fiduciary.

Schulist v. Blue Cross of Iowa, 717 F.2d 1127 (7th Cir.1983).¹⁰ Additionally, although an ERISA fiduciary cannot avoid liability for breach of duty by claiming to be acting under a plan provision,¹¹ there is no liability unless a duty is actually breached or the conduct violates ERISA. Since the non-assignment clause does not violate a fiduciary duty or ERISA, it is no breach for Delta to insist on compliance with it.

This court is not called upon to weigh the wisdom or the public policy of payment assignability. That is the function of Congress. We merely hold the non-assignment clause is legal and is not prohibited by Congress.

III. DISPOSITION

The court concludes that ERISA welfare plan payments are not assignable in the face of an express non-assignment clause in the plan. The preliminary injunction request should not have been granted. The order of the district court is reversed, and the matter is remanded to the district court for further proceedings consistent with this opinion.

Linton Joaquin, Central American Refugee Center, Los Angeles, Cal., for petitioner.

Mary A. Sedgwick, Asst. U.S. Atty., Los Angeles, Cal., for respondent.

Before WALLACE, Chief Judge, BROWNING, FLETCHER, CANBY, REINHARDT, HALL, BRUNETTI, KOZINSKI, THOMPSON, FERNANDEZ and T.G. NELSON, Circuit Judges.

The Opinion filed in this case on January 14, 1991,

923 F.2d 688 (9th Cir.1991), is vacated. As an alternative to the stay requested by the parties, within thirty days of the entry of this order the court will dismiss the petition for review without prejudice to reinstatement. Any objections to the dismissal without prejudice shall be filed within twenty-one days of the entry of this order. If no objection is filed, the petition will be dismissed without further notice.

To preserve the automatic stay under 8 U.S.C. § 1105a(a)(3), the mandate will be withheld until termination of any administrative proceedings affecting appellant Echeverria-Hernandez commenced pursuant to the settlement agreement in

American Baptist Churches v. Thornburgh, 760 F.Supp. 796 (N.D.Cal.1991), or the Immigration Act of 1990 (Pub.L. No. 101-649), or until further order of this court. The parties are instructed promptly to advise the court of any change in circumstances that might moot the petition for review or otherwise make it appropriate to issue the mandate.

WALLACE, Chief Judge, with whom Circuit Judges CYNTHIA HOLCOMB HALL, BRUNETTI, DAVID R. THOMPSON, and FERNANDEZ join, dissenting:

Our court has adopted an administrative policy that, once cases such as this are in the jurisdiction of a panel, the panel has the discretion to stay or decide the appeal and file a disposition. I assume the same policy applies to an en banc court.

The panel, for good reasons, decided not to stay. The majority of the en banc court believes we should. I disagree and would not stay the appeal or dismiss the petition.

Notes

ERISA defines a plan fiduciary as one who “exercises any discretionary authority or discretionary control respecting management of such plan....” 29 U.S.C. § 1002(21)(A). Delta does not contest that it is a plan fiduciary.

Appellees reliance on , cert. denied, is misplaced. In Deak, a fiduciary breached its duty when it inserted a clause, concerning suspending benefits upon a beneficiary‘s re-employment, into an ERISA plan, trying to modify an existing ERISA plan by inserting amendments.

See, (“[ERISA] trust documents cannot excuse trustees from their duties under ERISA....“); , cert. denied, (“The fiduciary duties section [of ERISA] [] requires adherence to the written plan documents unless their provisions conflict with statutory duties.... [cites omitted] One conflict might be identified between the contractual provision [at issue] [] and the standard of loyalty itself.“). Appellees rely on , which held that an “escape” clause barring coverage to beneficiaries who are also covered under their spouses policy violated ERISA, and that an ERISA fiduciary breached its duty by attempting to bar beneficiaries from recovery in reliance on the clause.